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Case studies

Celtic Inns

Sectors: Consumer & Leisure

Deal Type: MBO, Exited - Trade Sale

Transaction Value: £26 million


Dunedin contact:
Giles Derry

Celtic Inns


In October 2004, Sand Aire Private Equity (acquired by Dunedin in 2005) backed the secondary management buyout of Welsh-based pub operators Celtic Inns Ltd. Sand Aire and The Royal Bank of Scotland Structured Finance supplied £26 million of funding to complete the buyout and to provide ongoing expansion capital for the continued growth of the Celtic business. The incumbent management team, who had carried out an MBO of the business in 2003, rolled over their entire investment in to the ongoing business emphasising their belief in the future success of Celtic's offering.

Deal Features

Sand Aire had previously considered Celtic Inns as an investment prospect at the time of the initial MBO as it fitted well with Sand Aire's core investment strategy of backing proven management teams in existing cash flow positive businesses. Over the next two years, the Sand Aire team monitored the business, maintaining relationships with the management team so when the opportunity arose to back the secondary MBO, they were well positioned.

Sand Aire's investment helped Celtic Inns to pursue its expansion strategy of acquiring small groups or single pubs to create a high quality estate. Over the course of the investment, the estate increased from 47 pubs to 70. In addition, the introduction of Alan Connell as non executive director provided the business with invaluable property financing expertise.

The business attracted the interest of Wolverhampton & Dudley Breweries plc, who acquired the business for £43.6 million in March 2006. The investment generated a 2.5 times money multiple and an IRR of 101%.

Business Description

Celtic Inns, formed in March 2002 by Duncan Murray and Clive Williams, operated a portfolio of predominantly, tenanted pubs. The company had a strong geographic focus with the bulk of its portfolio of 70 pubs being local, community pubs in south and west Wales and southern England. The company's pubs became part of the Wolverhampton & Dudley Breweries portfolio following the sale of Celtic Inns in March 2006.

Celtic Inn's perspective

"The team were known to the Celtic management before a refinancing which gave us the opportunity to confirm our early favourable impressions. Besides the excellent chemistry between management and investor, they got the right balance of supporting the team and conscientious monitoring of the investment exactly right in my view, and always done with good humour." Duncan Murray, Managing Director, Celtic Inns

Your Expertise

What people say about us

"Dunedin’s investment provides us the platform from which to expand our services, capacity and international reach. We spoke to a number of potential investors but Dunedin stood out from the rest. We were impressed by their experience of growing and professionalising businesses, coupled with their integrity and open, direct culture"

David Barry

Principal, Blackrock PM

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